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IRS Whistleblowers Should See New Tone at the Top

The news that Steven Miller, deputy commissioner for services and enforcement at the Internal Revenue Service, will become acting IRS commissioner next month is likely to be a welcome development for tax whistleblowers.

Finally there will be a person in charge of the IRS who appears to be invested in its whistleblower program and knowledgeable about its potential.

During Shulman’s tenure, whistleblowers have been gotten the cold shoulder from the IRS, causing whistleblowers to doubt the agency’s commitment to the program.

Shulman’s legacy with whistleblowers is in the numbers. Since 2009, the number of claims has steadily sunk: The number of whistleblowers stepping forward has declined by a third, to the lowest point in four years.

Shulman has been conspicuously absent from any public discussion of the tax whistleblower program. During his term as commissioner, Shulman never said a word publicly about the IRS whistleblower program, which Congress created in 2006 at the behest of Sen. Chuck Grassley (R-Iowa). Shulman never even responded to numerous inquiries directed to him from Grassley about the whistleblower program. He left it to his deputies — in particular, Miller — to respond.

“Timely and comprehensive evaluation of information provided by whistleblowers is essential to the success of this program,” Miller noted. “Please give this subject your personal attention so that the Service can take full advantage of whistleblower information in our compliance programs.”

The IRS has taken some encouraging steps recently, making awards to a number of whistleblowers, including an award of $104 million to the UBS whistleblower, Bradley Birkenfeld. We can only hope that Miller will continue to see the value of whistleblowers to tax enforcement and will give the whistleblower program the “personal attention” he has requested from others.

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The risk/reward ratio for whistleblowers is great. It’s not for everyone, but if you want to learn how to blow the whistle from a veteran whistleblower, check out my blog: http://www.huffingtonpost.com/brian-penny/im-a-bank-whistleblower-a_b_1952819.html

Deputy Miller’s 90 day directives that you are referencing have not been i implemented. In fact, there was an email that told IRS Whistleblower Office Analysts not to act on the directives until they had further directions from Senior Management. What you are implying is that Commissioner Shulman is the root cause of the IRS Chief Counsel Office free hand in limiting, blocking and delaying 7623(b) award payments. Is that true?

Mr. Dean Zerbe described Deputy Commissioner Miller as “tireless prodding”. But it is hard to believe that Deputy Commissioner Miller is really going to “turn the corner” until the IRS implements Director Whitlock’s partial payment rules without the 12 month and $50,000 restrictions and pays more than the recent sensationalized award payments.

I hope that you are right about Mr. Miller’s leadership and intentions toward the unpaid 7623(b) whistleblowers.

Deputy Miller’s 90 day directives that you are referencing have not been implemented. In fact, there was an email that told IRS Whistleblower Office Analysts not to act on the directives until they had further directions from Senior Management. What you are implying is that Commissioner Shulman is the root cause of the IRS Chief Counsel Office free hand in limiting, blocking and delaying 7623(b) award payments. Is that true?

Mr. Dean Zerbe described Deputy Commissioner Miller as “tireless prodding”. But it is hard to believe that Deputy Commissioner Miller is really going to “turn the corner” until the IRS implements Director Whitlock’s partial payment rules without the 12 month and $50,000 restrictions and pays more than the recent sensationalized award payments.

I hope that you are right about Mr. Miller’s leadership and intentions toward the unpaid 7623(b) whistleblowers.

After 6 years of sabotage by senior IRS management and the IRS Office of Chief Counsel the IRS Whistleblower Program needs more than just a change of “tone” or mood music.

Actions speak louder than ambiguous statements with NO follow through. One big Bradley Birkenfeld payout doesn’t make for a revived IRS Whistleblower program with a brave new future as some politically connected attorneys are now suggesting.

Since Miller’s 20 June 2012 internal IRS memo WE’VE HEARD ABSOLUTELY NOTHING. Bradley Birkenfeld’s attorneys may be convinced but the rest of the IRS Whistelbowers, particularly those in the program since 2007 \ 2008 \ 2009 remain unconvinced. Thousands of whistleblowers have been left stranded.

Where is the resolution of:

No awards based on Criminal fines, No awards based on Title 31 FBAR’s No awards paid until 2 year appeal rights have expired, No interim or partial payments for 7623(b) claimants, Withholding tax on awards Only 10% awards paid on submissions based on worldwide judicial or administrative proceedings. Overly broad definition of “planners and participators” Overly broad definition of reg 6103. Refusal IRS to use reg 6103 (n) and properly talk to and debrief whistleblowers about the documentary evidence they have submitted.

etc etc etc.

Where all of the above is addressed by Miller, then and only then should we start believing there has been a change of tone.

Thanks for your comments, Bubba and Linda. IRS whistleblowers still will face stiff challenges. I’m not expecting Miller to totally turn around the whistleblower program, particularly if the Chief Counsel’s Office continues to erect roadblocks to a rational administration of the program. Nevertheless, I expect that Miller will be an improvement — not perfect, but an improvement.

Thank you for generously responding to Linda’s and my comments. Phillips & Cohen is the most influential and connected Whistleblower law firm in America. Being on the “inside” and keeping abreast of all the latest information, you are better informed than the rest of 7623 (b) whistleblowers who are condemned to the long standing information vacuum.

Is Senator Grassley the only U.S. Senator fighting for IRS whistleblowers?